(Yicai Global) June 25 -- Nearly 80 percent of the Chinese companies lining up to go public on the mainland’s bourses have chosen to float on the Shanghai Stock Exchange’s Star Market and Shenzhen’s ChiNext Board, the only two exchanges in the country to implement the new, quicker registration-based system, according to a recent report.

There were 633 Chinese companies preparing to list in the mainland as of June 21, according to US professional services firm Ernst & Young. Most of these have applied to list on the Nasdaq-style Star and ChiNext boards in order to by-pass the approval-based IPO system still used by the main bourses which has to pass through regulators and can take years to come through.

However, exchanges will still need to perform audit duties strictly under the registration-based IPO system, the report said. The China Securities Regulatory Commission will look closely at exchanges’ audit quality, issuance conditions and information disclosure during registration. The review may continue to be stringent in the future, it added.

The number of listings on the mainland more than doubled in the first half from the same period last year thanks to the implementation of the simpler registration-based system and the strong economic recovery after the Covid-19 pandemic, the report said.

Some 247 firms went public in the six months ending June 30, raising CNY211.8 billion (USD32.8 billion), a 52 percent year on year gain. Some 70 percent of these were on the Star Market or ChiNext Board, contributing 59 percent of the funds raised.

Industry IPOs ranked first in terms of the number of companies going public and the amount of funds raised in the first half, followed by companies in the technology, media and communications fields. Only four financial companies listed.

Editor: Kim Taylor